TaxTMI 
TaxTMI 
2019 (8) TMI 878
X X X X Extracts X X X X
X X X X Extracts X X X X
....r. Arshit Anand, Mr. Divyang C., Mr. Himanshu Satija and Mr. Ajitesh Soni, Advocates for RP. Mr. Ramji Srinivasan, Senior Advocate with Mr. Spandan Biswas, Mr. Srideepa Bhatt Acharya and Ms. Ruchi Choudhary, Advocates for SBI. JUDGMENT In the 'Corporate Insolvency Resolution Process' initiated against 'Monnet Ispat & Energy Limited'- ('Corporate Debtor'), the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai, by impugned order dated 24th July, 2018 approved the 'Resolution Plan' submitted by 'Consortium of Aion Investment II Private Limited & JSW Steel Limited' ('Successful Resolution Applicant') which is under challenge in all these appeals. 2. The Appellant- 'Bharat Heavy Electricals Limited' just prior to approval of the 'Resolution Plan', filed an Interim Application challenging the decision of the 'Interim Resolution Professional' collating its claim. The Adjudicating Authority, by order dated 19th June, 2018, having rejected the application which has been challenged by the 'Bharat Heavy Electricals Limited'. Company Appeal (AT) (Insolvency) No. 550 of 2018 (Appellant- 'Bharat Petroresources Limited') 3. According to Appellant, it i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e 'Resolution Professional'. The Appellant subsequently claimed further amount of Rs. 9,92,86,892 towards future claims accrued after the Insolvency Commencement Date, which has not been accepted by the 'Resolution Professional'. 8. The Adjudicating Authority, in the meantime, by impugned order dated 24th July, 2018 approved the 'Resolution Plan' submitted by the 'Consortium of Aion Investment II Private Limited & JEW Steel Limited' ('Successful Resolution Applicant') under Section 31(1) of the 'I&B Code' without deciding the future claim of the Appellant. 9. It was further submitted that the Impugned Order is contrary to Section 30(2)(e) of the 'I&B Code', as it seeks to extinguish all rights and obligations of the Appellant in respect of the claim, not provided for in the 'Resolution Plan' prior to the Insolvency Commencement Date. Thus, the Appellant is left remediless in so far as its claim which is not provided for in the 'Resolution Plan' is concerned. 10. Reliance has been placed on the decision of this Appellate Tribunal dated 4th July, 2019 in "Standard Chartered Bank vs Satish Kumar Gupta, R. P. of Essar Steel Ltd. & Ors. (Company Appeal (AT) (Insolvency) No. 242....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Agreement', for operations of Block 2, the 'Bharat Petro Resources Ltd.' was designated as the Lead Operator. 17. It was further contended that the Appellant and 'Bharat Petroresources Ltd.' both being the Lead Operators under the 'Joint Operating Agreements' for Block 1 and Block 2, respectively, had been raising cash calls on the other four respective Partners in terms of the 'Joint Operating Agreements', including the 'Corporate Debtor'. One of the 'Joint Operating Partner' namely- 'Monnet Ispat & Energy Limited'- ('Corporate Debtor') defaulted in payment of its cash calls and it ceased to pay its share of the cash calls from 8th April, 2016 and 6th April, 2016 for Block 1 and Block 2, respectively. 18. According to the Appellant- 'Gail (India) Ltd.', as on the date of the commencement of the 'Corporate Insolvency Resolution Process' i.e., 18th July, 2017, 'Monnet Ispat & Energy Limited'- ('Corporate Debtor') defaulted in paying its cash calls amounting to Rs. 19,13,51,015/- for operations carried out under Block 1 and Rs. 9,58,88,886/- for operations carried out under Block 2 in favour of the Appellant. Accordingly, both the Appellant and the 'Bharat Petro Resources Ltd.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the 'Resolution Professional' in the Information Memorandum prepared under Section 29 of the 'I&B Code', 'Bharat Petro Resources Limited' submitted its claim as an 'Operational Creditor' in Form B and was classified as an 'Operational Creditor' in the Information Memorandum. Now it is seeking to be treated with highest priority for having purportedly provided services of national importance. 23. It is accepted that the claim of 'Gail (India) Limited' and 'Bharat Petro Resources Limited' arises on account of non-payment of cash calls (request in the nature of re-imbursement) by the 'Corporate Debtor' for its contribution under a 'Joint Operating Agreement' and a 'Production Sharing Agreement' for exploration and exploitation of petroleum resources. 24. Learned counsel for the 'Successful Resolution Applicant' has relied upon the Information Memorandum prepared and updated by the 'Resolution Professional' under Section 29 of the 'I&B Code' for preparation and submission of the 'Resolution Plan' in accordance with Section 30(1) of the 'I&B Code'. It was submitted that it is the function and duty of the 'Interim Resolution Professional' to invite, verify and collate the claims....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nsuring that the interests of all stakeholders are balanced in addition to the fact that the 'Resolution Plan' of the 'Successful Resolution Applicant' has been completely implemented and the 'Successful Resolution Applicant' now has a vested right in its successful implementation, no adverse consequence can be visited upon the 'Successful Resolution Applicant' and the 'Successful Resolution Applicant' cannot now be made to redistribute payments under its 'Resolution Plan'. 29. We have heard the parties and perused the record. 30. From 'I&B Code', it is clear that on initiation of 'Corporate Insolvency Resolution Process' (after admission), the public announcement of the 'Corporate Insolvency Resolution Process' is made under Section 15. Thereafter, the 'Interim Resolution Professional' is empowered under Section 18(1) (b) to receive and collate all the claims submitted by creditors. 31. The aforesaid claim(s) relates to the debt payable to a creditor(s) before initiation of the 'Corporate Insolvency Resolution Process' and do not relate to any amount payable during the 'Corporate Insolvency Resolution Process'. 32. 'Bharat Petroresources Limited' submitted its claim on....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... committed by the Appellant- 'Gail (India) Limited', it cannot allege any wrong committed by the 'Resolution Professional'. 38. The 'Successful Resolution Applicant' namely- 'Consortium of Aion Investment II Private Limited & JSW Steel Limited' has made it clear that it has allocated a sum of Rs. 114,81,27,623/- for payment in favour of 'operational debt' (other than Government dues, workmen and employees) which is 21.77% of their respective dues. On the other hand, it has allocated a sum of Rs. 11,01,49,15,16,88/- for payment of 'financial debt' which is 26.28% of their respective claim. 39. The 'Operational Creditors' and the 'Financial Creditors' having given almost same treatment, no interference is called for on the ground that 'Gail (India) Limited' has not been treated as 'Operational Creditor'. Company Appeal (AT) (Insolvency) No. 555 of 2018 (Appellant- 'IFCI Limited') 40. The grievance of the Appellant is with regard to the 'Resolution Plan' are as follows: 1. The Plan does not give equal treatment to dissenting/assenting and secured/unsecured financial creditors. • The Plan currently provides for different payments to dissenting/assenting and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... exclusive mortgage of the Appellant is being erased and the Appellant is denuded of its rights over the property on which it has exclusive mortgage, without being given any benefit of its right being treated as an 'Unsecured Financial Creditor'. Stand of the 'Successful Resolution Applicant' 49. With regard to the claim of the 'IFCI Limited', learned counsel for 'Successful Resolution Applicant'- ('Consortium of Aion Investment II Private Limited & JSW Steel Limited') submitted that the 'IFCI Limited' is estopped from objecting to the 'Resolution Plan' on the following reasons. 50. It has been brought to our notice by the 'Successful Resolution Applicant' that pursuant to the Adjudicating Authority's order, IFCI' s claim was included in the category of 'Unsecured Financial Creditor'. At no juncture 'IFCI Limited' objected to the admission of its claim as an unsecured debt despite the fact that the 'Committee of Creditors' of the 'Corporate Debtor' at its meeting on 7th April 2018, was apprised of the status of the acceptance of its claim in respect to the corporate guarantee as unsecured claim. The 'IFCI Limited' had raised no objection; on the other hand, it accept....
X X X X Extracts X X X X
X X X X Extracts X X X X
....duced the claim amount to Rs. 1,33,76,135/-. Chart showing amount claimed and amounts rejected has been shown below: Projects Total Amount Claimed Claim Verified Total Claim Verified Final Claim after Set Off from Verified Claim 1*80 MW Rs. 9,97,68,877 (Outstanding Rs. 5,16,11,900 + Interest- Rs. 4,81,56,977 Rs. 5,16,11,900 (Claim of interest rejected) Rs. 5,16,11,900 + Rs. 2,93,87,500 Rs. 1,33,76,135/- (Final Claim amount) (Rs. 8,09,99,400 less Rs. 6,76,23,265) (Rs. 6,76,23,265 unilaterally reduced/setoff by Resolution Professional towards material allegedly supplied to BHEL by CD without verifying from BHEL 2*45 MW Rs. 15,76,01,904.22 (Outstanding Rs. 6,13,72,750 + Interest- Rs. 9,26,29,154 Rs. 2,93,87,500 Claim of interest rejected and following amounts also reduced by Resolution Professional- -Rs. 1,58,31,250 (Liquidated Damages) -Rs. 1,55,54,000 (Overrun charges) -Rs. 6,00,000 (amount to be paid by KO Gransons for work of turbine done by BHEL) Total Claimed amount- 25,73,70,781 (Twenty five crores seventy three lacs seventy thousand seven hundred and eight one rupees) =Rs. 8,09,9....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the 'I&B Code'. Statutorily, it is the function and duty of the 'Resolution Professionals' to invite, verify and accept or reject claims and as a 'Resolution Applicant', the 'Successful Resolution Applicant' has rightfully relied upon the same and its interests cannot be prejudiced for information contained in the Information Memorandum. 59. It was contended that the Appellant- 'Bharat Heavy Electricals Limited' is estopped from challenging the classification at this belated stage. 60. It was further submitted that subsequent to the approval of the 'Resolution Plan' by the Adjudicating Authority, the 'Successful Resolution Applicant' has inter alia taken the following steps in compliance with the 'Resolution Plan': (a) Allotment of equity shares to the 'Financial Creditors' of 'Corporate Debtor' pursuant to the conversion of debt amount to Rs. 215,19,82,190/-; (b) Reduction of the equity share capital of the company and extinguishment of the equity share capital held by the promoters of 'Corporate Debtor' and consolidation of the reduced equity share capital of 'Corporate Debtor'; (c) Completion of the deemed issuance of optionally convertible p....